Passive Income Texas Franchise Tax

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Passive income texas franchise tax. The texas comptroller of public accounts recently issued amendments to title 34 of the texas administrative code 3 582 relating to the filing requirements for the texas franchise tax for passive entities. Passive entities that are registered or are required to be registered with either the texas secretary of state sos or the comptroller s office are required to file form 05 163 texas franchise tax no tax due report to affirm that the entity qualifies as passive for the period upon which the tax is based. Exempt passive entities will be required to file annual information statements to verify that the passive entity qualifications are met but they will owe zero tax. One of the most important exemptions for the texas franchise tax is the exempt passive entity.

Subtitle f franchise tax. Terms used in texas tax code 171 0003. A voluntary contract between two or more persons to pool some or all of their assets into a business with the agreement that there will be a proportional sharing of profits and losses. Section 171 0003 definition of passive entity.

We will begin our discussion by defining what is considered a passive entity in. Means any matter or thing capable of private ownership see texas tax code 1 04.